Continental Coal’s De Wittekrans Coal project granted mining right

Continental Coal Limited, the South African thermal coal production, development and exploration company, says the South African Department of Mineral Resources (DMR) has granted a Mining Right in respect of the Company’s De Wittekrans Coal Project.

“We are delighted with this development. The granting of the Mining Right for our De Wittekrans Coal Project represents a significant milestone for the project and the Company ahead of taking the project into production over the next 12 months,” Continental’s Chief Executive Officer, Don Turvey said

The announcement comes after Continental submitted its application for the New Order Mining Right in 2010.

The De Wittekrans Coal Project is located approximately 45km north of the company’s operating Ferreira and Penumbra Coal Mines and Delta Processing facility.

The Group completed its preliminary optimisation work on the 2011 Feasibility Study during H1 2013. The optimisation study confirmed the economic and technical viability of the De Wittekrans Coal Project. This study identified the opportunity to potentially enhance the project returns through utilisation of existing coal wash plants and rail sidings in the vicinity of the De Wittekrans Coal Project.

The optimisation work completed during the year has confirmed the potential to improve the project economics and reduce the capital expenditure necessary to bring the De Wittekrans Coal Project into production.

The work identified the opportunity to develop the De Wittekrans Coal Project to be a major opencast and underground thermal coal mining operation supplying domestic and international markets over an initial 30 year mine life. Annual production of 3.6 Mtpa is expected after the initial build-up phase.

The optimisation studies determined a phased development of the project with an initial 7 year opencast mining operation with underground development proposed to commence in the third production year with access from the highwall. Underground mining of a conventional bord and pillar operation is planned with six continuous miner sections.

The Company submitted its application for an Integrated Water Use Licence approval in Q4 2012. The approval of the Integrated Water Use Licence is expected in Q1 2014.

As previously announced the company anticipates a development decision for the De Wittekrans Coal Project to be made in H2 2013.The De Wittekrans Coal Project is expected to be the Company’s fourth producing mine and, when developed, has the potential to double the annual ROM production and export and domestic thermal coal sales of the company.